KBS REIT III Secures Short-Term Extensions on Two Office Loans as It Pursues Refinancing
The lender on the $137.8 million 3001 & 3003 Washington loan may accelerate it before its January 2027 maturity if it judges a refinancing unlikely to close on the required terms.
November 6, 2026
KBS Real Estate Investment Trust III has extended the maturities of two property loans into December and January, giving the non-traded office REIT more time to line up refinancing for both. The October 30 agreements cover the $317.4 million loan secured by Accenture Tower and the $137.8 million loan secured by 3001 Washington Boulevard and 3003 Washington Boulevard.
KBS REIT III said it is pursuing a refinancing of both loans but gave no assurance on its certainty or timing.
Accenture Tower
The Accenture Tower loan now matures December 17, 2026. KBS REIT III can extend it again to November 2, 2027 if it satisfies conditions in the new modification and pays a $0.4 million extension fee.
The loan carries interest at one-month Term SOFR plus 325 basis points from November 2, 2026, and the spread falls to 300 basis points once the extension option takes effect. As of October 30, the outstanding balance was $317.4 million, with another $4.6 million available for future disbursement subject to conditions in the loan documents.
The October agreement is the sixth modification of a facility first arranged in November 2020, with U.S. Bank as administrative agent and Bank of America as syndication agent. Deutsche Pfandbriefbank and the National Bank of Kuwait are also in the current lender group. A fourth modification in December 2024 had set a November 2, 2026 maturity, along with an additional 12-month extension option under the loan agreement.
3001 & 3003 Washington
The Bank of America loan on 3001 and 3003 Washington Boulevard now matures January 20, 2027, and the ninth modification leaves no further extension options. The borrowers paid a $0.1 million extension fee, and the balance stood at $137.8 million as of October 30.
The lender may also declare a default and accelerate the loan before January 20 if it determines, in its reasonable discretion, that a refinancing is unlikely to be completed by maturity on the terms the modification requires.
The loan dates to May 2019. A seventh modification in April 2026 moved its maturity to August 4, with an option to reach November 2. An August 4 letter agreement waived certain conditions to exercising that option and extended the loan to November 2.
Going-Concern Doubt and Lender Remedies
KBS REIT III restated its going-concern doubt. Citing upcoming loan maturities and required principal paydowns, a challenging commercial real estate lending environment, and low transaction volume in the U.S. office market for assets the size of its own, the REIT said management's plans may not be considered probable and do not alleviate substantial doubt about its ability to continue as a going concern for at least a year from August 13, 2026. It raised the same doubt in March, in an annual report that put roughly $1.3 billion of debt coming due within a year.
Several of its loan agreements impose conditions outside its sole control, including principal paydowns, asset sales, and identified actions relating to its portfolio. The agreements contain cross-default provisions, so an event of default under one facility may trigger defaults under certain others. KBS REIT III has also pledged the equity of certain subsidiaries in connection with loan restructurings, and lenders exercising enforcement rights after a default under certain facilities can take possession of that equity. Cash sweeps under several loan agreements limit its access to cash flow from certain properties.
If it cannot meet the terms of its loan agreements, KBS REIT III said it expects to pursue further refinancing, restructuring, or asset sales. It may also relinquish one or more secured properties to the mortgage lender or seek bankruptcy protection to implement a restructuring plan, which would constitute an event of default under its debt.
